Weitzner v. COMMISSIONER OF INTERNAL REVENUE

• Decision Date: 21 June 1928
• Docket Number: Docket No. 9526.
• Parties: EMIL WEITZNER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Board of Tax Appeals

12 B.T.A. 724 (1928)

EMIL WEITZNER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 9526.

Board of Tax Appeals.

Promulgated June 21, 1928.

Benjamin Harrow, Esq., for the petitioner.

J. L. Deveney, Esq., for the respondent.

The petitioner alleges error on the part of respondent in disallowing a claimed bad debt deduction which resulted in the determination of a deficiency in income tax in the amount of $194.47 for the calendar year 1921. The facts were stipulated.

FINDINGS OF FACT.

In 1921 the petitioner expended the sum of $1,967.50 for the care and treatment of his father in a sanitarium. The father was sick during the entire year of 1921. He had no assets and no earning capacity due to his illness. The payments were made by the petitioner because of the necessity of the situation. By the end of the year the condition of petitioner's father was such that petitioner knew his father would never be able to repay the amounts expended.

In determining the deficiency the respondent allowed the petitioner a credit of $400 on account of the dependency of his father, in addition to the credit of $2,800 claimed by petitioner in his return on account of personal exemption and credit for dependents.

OPINION.

ARUNDELL:

It is elementary that one of the essential prerequisites to a bad debt deduction is that the debt must have an existence in fact. Luke & Fleming, Inc., 1 B. T. A. 12. There are many different transactions out of which the relation of debtor and creditor may arise and so there are many definitions of the word "debt." It is a word that is not susceptible of definition so as to fit every situation and as far as we know there has been no comprehensive judicial determination of the meaning of the word. However, in all of the definitions that are given there is the underlying thought of an obligation to pay. The existence of an obligation is the sine qua non of a debt. In the present case no such obligation can be found in the evidence. There is no showing that petitioner's father ever made any promise to pay or that he ever recognized he was under any obligation to reimburse the petitioner. The father had no assets and no earning capacity and the money spent by the petitioner bears far more the marks of a gift than of a loan. See Max Baumann, et al., 8 B. T. A. 107.

Judgment will be entered for the respondent.